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TUC warns over pension reforms

Wednesday, 8 February 2012

Nearly two million women could be adversely affected by pension reforms, the TUC warned

Nearly two million women could be adversely affected by pension reforms, the TUC warned

Union leaders have called for changes to the planned auto-enrolment of workers into pension schemes, warning that over 1.8 million women could be adversely affected.

Auto-enrolment will start to be rolled out from October when larger firms will have to start automatically putting eligible employees into pension schemes unless they specifically say they do not want to be included.

The TUC urged ministers to freeze the lower threshold in the regime and keep the £7,475 earnings level at which auto-enrolment is triggered.

The union organisation said Government plans to increase the income tax threshold to £10,000 and link that to pensions could eventually stop almost two million women from being auto-enrolled into pensions.

More than one in seven women workers currently earn more than the lower earnings band but under £10,000, said the TUC.

General secretary Brendan Barber said: "Auto-enrolment is a huge advance, but no one can pretend that contributions are good enough, particularly during the long wait before every company is covered by auto-enrolment and the two years after that before everyone gets their full contribution.

"The Government should use its review of the thresholds to widen the earnings band each year by freezing the lower limit, while increasing the upper band limit in line with earnings. This would give a small manageable increase in the earnings band each year. It's the pensions equivalent of fiscal drag - raising more tax by freezing tax thresholds.

"In particular we urge the Government not to raise the auto-enrolment earnings trigger in line with the income tax threshold, which the coalition is keen to raise to £10,000.

"Whether this is the best way to help the low-paid is an interesting debate, but it would be disastrous if it had the unintended consequence of excluding a significant proportion of women workers from pensions saving."

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